Policy creates mistress economy

By Huang Tien-lin 黃天麟

Uni-President Enterprises Corp is going to invest US$30 million to set up a research and development headquarters in Shanghai. The company’s decision once again lays bare the fraudulent nature of “manufacturing in China and receiving orders in Taiwan” — a notion that pro-China academics and media use to rationalize the trend for Taiwanese companies to “go west” and invest in China.

If there is no manufacturing industry left, what research and development is there likely to be? If there is no nation and no sovereignty, what kind of culture and creativity can there be? If industry and the economy are not thriving, how much strategic planning and design is likely to be done?

These are very obvious questions to ask, but that has not stopped the government in recent years from constantly uprooting industry, intentionally or otherwise, and transferring it root and branch to the other side of the Taiwan Strait.

In the process, the government has been peeling off the nation’s sovereignty layer by layer and handing it to China. It has gone on to promote a baseless “mistress economy.” These trends are dressed up with impressive, but illusory policies. While countless blocks of luxury apartments are being built to house the few who stand to benefit, most people can only admire these mansions from the outside.

A mistress economy is an economic policy that makes Taiwanese into a third party and does not allow people to play a central role. Instead, prosperity or decline depends on someone else — the real central figure. The triangular trade model, in which companies are supposed to receive orders in Taiwan and manufacture the goods in China, is what led to today’s mistress economy.

This economic policy hands the central role over to someone else, and it is the reason young people entering the job market have to put up with miserable monthly salaries of about NT$22,000 or less.

The mistress economy mentality has permeated politics, business and academia in Taiwan over the last decade and has had very harmful effects. Taiwan and China signed the cross-strait Economic Cooperation Framework Agreement (ECFA) in June 2010, and it took effect later that year. The follow-up cross-strait service trade agreement was signed in June this year, but has yet to be approved by the legislature.

President Ma Ying-jeou (馬英九) has even been willing to sacrifice Legislative Speaker Wang Jin-pyng (王金平) to get the pact approved. These two agreements are part and parcel of the mistress economy setup, because in the long run they will both cause Taiwan to lose control over its own faltering economy. Last week, Ma gave his stamp of approval to the Cabinet’s proposals for setting up “free economic pilot zones” (FEPZ). His government would have people believe that these zones will be the main ingredient for turning the economy around next year. However, a close inspection of the plan makes it clear that it is still stuck in the mistress economy framework. None of the “targeted industries” named in the plan are focused on improving industry. Rather, they emphasize attracting floating capital, or “hot money,” from abroad, and especially from China. Whether it is financial services, intelligent logistics or educational innovation, they are all likely to attract the same flock of vultures who fight over whatever flesh they can find and fly away when they have picked the bones clean.